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Why Panera Bread Might Be Going Stale

Does this analyst make a good case? Or is it just more noise from Wall Street?

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

So what: Along with the downgrade, analyst John Glass removed his price target on the stock of $190 per share, suggesting that he sees very limited upside in Panera right now. Glass is particularly concerned that the company's same-store sales are slowing amid intensifying competition from less expensive rivals, prompting investors to lower their valuation estimates on the stock.

Now what: Glass lowered his EPS estimates to the low end of Panera's 2013 guidance and below the Wall Street consensus for 2014. "While check growth is a complex combination of pricing, mix, and catering, it is clear from our survey work that value is a perceived weakness in an otherwise sterling brand," said Glass. "One third of [Panera] consumers indicate that menu prices are high, which we think lowers frequency." With the stock flirting with its 52-week lows once again and trading at a reasonable forward P/E of 20, however, the growth that Panera does have left might be available on the cheap.